Blistering temperatures support higher corn prices

September corn finished up $0.35 1/2 at $7.09 1/2, $0.04 1/2 off the high and $0.22 1/2 up from the low. December corn closed up $0.34 at $7.08 1/2. This was $0.23 up from the low and $0.04 1/2 off the high. December corn gapped higher on the open and surged past $7.00 early in the session. After a brief mid-day dip on profit taking, corn surged into the closing bell to finish the day near its highs.

Continued concern over decreasing new crop corn yields due to blistering temperatures this week continued to support the corn market. Afternoon weather maps called for a little warmer 1- to 5-day forecast for the northern U.S. Extreme heat is expected to stick around for another 3 to 4 days in the central and southern Midwest. Changes also include a chance for better rainfall in the Midwest and western U.S. plains in the 6- to 10-day map.

Ethanol production

Ethanol production for the week ending June 29th averaged 857,000 barrels per day. This is down 2.9% vs. last week and down 5.2% vs. last year. Corn used in last week's production is estimated at 91.3 million bu., posting a new 16-week low and displaying further signs of demand destruction from the rally in corn. Corn use needs to average 98.25 million bu. per week to meet 2011/2012 USDA estimate of 5.05 billion bu. Ethanol stocks as of June 29th were 20.3 million barrels, which is also a 16-week low. This is down 2.2% vs. last week but up 9.3% vs. last year.

The Brazilian government adjusted their 2011/2012 corn crop production to 69.48 million tons, nearly 2 million tons higher than their last revision.

Outside markets are offering minimal resistance as the U.S. dollar surged over 1% and stocks were marginally weaker.